Games market slump continues
The GAME Group's woes could continue, thanks to a global slump in the games market which shows no sign of slowing.
NPD's figures suggest that the global market for computer and video games continues to slide, following a claimed drop of 20 per cent in February and 34 per cent in January compared to the same period last year. In real figures: the global games market in March was worth a mere £690 million compared to £922 million this time last year.
The drop comes across the entire gaming market: hardware dropped 35 per cent, software 25 per cent and even accessories - typically a money-maker for high-street retailers thanks to easy upsell potential and high margins - were down 8 per cent year-on-year despite increased shipments, as margins are squeezed across the channel.
Not everything shrank in March, however. 'Outside of new physical retail sales, we find that the consumer spend on content on used games, rentals, subscriptions, mobile games, social network games, digital full game downloads, and add-on content accounted for an additional $2.5 billion to $2.7 billion across the US, UK, France, and Germany in Q1 2012,' NPD analyst Anita Frazier explained in a report to investors.
The massive drop in turnover for the games industry comes at a bad time: GAME Group was forced to close 277 of its stores ahead of a buy-out from the OpCapita investment group, due to an unusually slow Christmas period. With OpCapita needing to keep the creditors on-side, it needs to see growth in the games market - not the continued slump NPD's figures demonstrate.
There are a few bright spots to be found in NPD's report: BioWare's Mass Effect 3 managed to sell more than twice as many copies as its predecessor in its first month, suggesting that there's still room in the shrinking market for a triple-A title to do well. Non-traditional accessories, including stored-value points cards, subscription cards and character packs for RFID-based collectible game Skylanders, also showed growth and accounted for seven of the top ten best-selling accessories for the month.
There's a key metric missing from NPD's analysis, however: digital distribution. The research outfit readily admits that its figures do not reflect sales made through publishers own-brand digital distribution services, like Valve's Steam or EA's Origin, hiding potential growth for the market. While NPD is working with fellow researcher EEDAR to get a handle on digital distribution figures, accurate results won't be available until a future report.
Should the disappearing sales prove to be simply moving to digital distribution platforms, the games market may not be in quite so parlous a state as NPD's research indicates. Such a move, however, would prove devastating for high-street retailers - including OpCapita's latest investment - if it continues at its present pace.
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Discuss in the forums ReplyInitial sales for ME3 were good, but they dropped rapidly after the ending fiasco surfaced.
And it's still hard to find the Skylanders figures in the shops. They fly off the shelves as soon as they're back in stock.
I'd prefer to see some MAT (moving annual total) figures, this is a far more realistic view of the market, especially one that's seasonal.
On top of that, NPD admit themselves there figures only account for less than 30% of the actual gaming market, which isn't remotely representative. All it really means is retail sales are falling, and everyone knows that anyway.
But everyone knows download sales aren't *real* sales!
2. Most big studios spend the bulk of their marketing and development budget on re-hashes of the same old games. People eventually grow out of/get bored of these games and move onto other things. IE oh no, not another MW game with slightly different weapons and even more quick fixes from ranks and perks.
Eventually there will be no growth, just a static turnover of old players leaving and new younger ones buying into the franchises.
Unfortunately, if the movie and music industries are anything to go buy, digital sales are going to get way worse before they get better...to many superfluous rich men in suits desperately trying to remain relevant in a changing world.
The ironic thing is that the more money they throw at a game...the worse it gets, as those holding purse strings start getting nervous, and then urge a risk-free game.
But it's OK, because a hyperactive's fourteen year old's money is as good as a mature gamer. Art? Who cares? Bottom line? Hell yes!
Here's hoping, if even the great global public is getting sick of the annual re-skin schedule then something's got to shake it up...
for a franchise like COD that brings out one game a year yes. but for the industry as a whole mature gamers tend to have much more disposable income. they keep the industry as a whole going. but then disposable incomes have been squeezed of late so i am not surprised in the least that retail has suffered as most people will be more inclined to save a few pounds by going digital/online and wait a few days to download/arrive.
plus there haven't been many good games released of late, in my eyes anyway, just waiting for cs:go (beta seems ok but it aint no tf2) and borderlands 2 (a game that seems to have a bit of coolness about it, refreshing!) now just to play my £5 deus ex download while i wait.
+1
Exactly this.
a) nothing out there of note all big titles came out for christmas this year. Lat two year March was the big month
b) Still playing old titles. I've 20 games to catch up on and will only buy more if theres a steam sale on.
c) All my games are digital downloads and I refuse to buy from origin.
I now only buy my games on PC if they are discount from online retailer, I no longer impulse buy at the shops.
Smarthphone games.. sure, they are free or like less than a quid.
RRP of 50 pounds for a computer game on console, no thanks.
PSVita, 260 pounds, ermm..pass, see above.
3DS, 150 pounds, pass, I can play the same games without eye strain if I had the normal DS which I dont, see above.
More importantly how many versions of the same game using the same underlying software will people buy before they get bored.
Then you have missed out on a lot of games that I (and many others) have enjoyed. I've always found I can tolerate F2P for about 12 hours and then it just gets tedious.